What do you get when you put a lifelong politician, a former car dealer and a conservative Christian insurance salesman into a room together?
Apparently, you get a “good fit.”
Minnesota DFL Gov. Mark Dayton struck a deal with House Speaker Kurt Daudt and Senate Majority Leader Paul Gazelka this week to offer relief to about 125,000 Minnesotans who saw their health care premiums skyrocket last year. The plan will cost the state about $326 million from its budget reserves and offer people on the individual insurance market a 25 percent rebate if they make too much money to qualify for federal subsidies.
The deal passed the House and Senate on bipartisan votes Thursday and Dayton quickly signed it into law.
The agreement comes after months of negotiations between the governor and Republicans that hit a low point last December, when Dayton and Daudt stormed out of a public meeting over the issue. But three weeks into the 2017 legislative session, those tensions seem to have faded, as Dayton and his staff engaged with legislative leaders to get a deal before January 31, the deadline for people to sign up for coverage through open enrollment.
Most people around the Capitol think the deal bodes well for the rest of the 2017 session. “The speaker and I and the governor, I think, are a good fit together,” said Gazelka, who is serving his first term as Republican Senate Majority Leader. “We all bring different things to the table. I expect that this kind of cooperation you will see as we move forward to the transportation bill and as we work through the budget, tax relief, bonding bill.”
“This is a good first step,” Daudt said. “There have been some tensions around our relationships the last few months based on how the end of last session happened.”
Something for everyone
The health insurance premium relief will be administered through the state’s health plans in the form of discounts on insurance bills. It’ll take several weeks to build the computer system needed to process the discounts, with relief coming as soon as April. Discounts are also retroactive to the beginning of the year. The final package includes an extra $15 million to cover insurance for people who have a handful of serious conditions or who are at the end of their life who lost their coverage.
There’s something for everyone in the bill, including Dayton’s plan to give 25 percent rebates to everyone and have the health plans administer the process. Republicans wanted the state to process the checks only for those who meet certain income thresholds. Dayton also pushed for the elimination of a last-minute amendment in the House to not require insurers to cover every illness mandated under the Affordable Care Act.
For Republicans, it was important to include some reforms into the package. Dayton agreed to a provision that sets up a health care cooperative for farmers. But the big change is that the bill allows for-profit health maintenance organizations (HMOs) to operate in Minnesota for the first time in four decades. Republicans say the change will give Minnesotans more coverage options in the marketplace, but the change wasn’t greeted warmly by Democrats.
In particular, Democrats said the idea wasn’t vetted in committee and doesn’t include any language that lays out how a non-profit HMO could turn into a for-profit organization, putting in jeopardy those organization’s patient-funded reserves. “One-time premium relief should not be tied to permanent changes, many of them very harmful, none of them really vetted,” said Sen. John Marty, DFL-Roseville.
“If the purpose of a for-profit company is to make a profit, the way the make their profits is to charge more for premiums or decrease what they pay for,” Marty added. “The bottom line is that’s not what we want.”
Leaders expecting ‘good things’ this year
Premium relief has not been the only deal struck between Dayton and the Republican controlled-Legislature since the session started. They also quickly agreed to a $21 million federal tax conformity bill ahead of a busy filing season.
“Anybody who knows anything about being around here, you get bills done in January and you are moving pretty fast,” said Gazelka, who led the entire Senate floor in singing happy birthday to Dayton, who turned 70 on Thursday. “I expect good things moving forward.”
But there are plenty of tests ahead. Dayton and Republican leaders must agree to a more than $40 billion state budget over the next two years. In Dayton’s budget address, he pitched a $45.8 billion plan that increases the size of the state’s budget by 10 percent and includes fee increases, a gas tax and a controversial plan to introduce a “public option” into the individual health insurance market.
Gazelka said there’s not a lot of support among Republicans for that idea, but he plans to hold a hearing on Dayton’s proposal either way. Daudt said he’s open to that idea as well.
For his part, Minnesota Management and Budget Commissioner Myron Frans thinks good things are ahead for the 2017 session. He’s become Dayton’s point-person on negotiating big issues with the Legislature, including the premium relief deal. “This is really critical because both sides, the Legislature and the governor, had very different views about how to do this, and we were able to come together and agree on one bill and the amount of money,” Frans said. “I think this portends very well for the rest of the session.”